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What’s next for Tax Credits for Low-Wage Workers?

Blog Date:

Wednesday, February 10, 2016

by Alexander Johnston, Member Engagement Intern

As a new LSA intern and a first-time visitor to Washington, D.C. I was excited to attend my first Capitol Hill forum on January 29. The forum, one of many that occur in our nation's capital weekly brought together prominent thought leaders and experts to discuss the future of tax credits for low-wage workers. The main topic of discussion was childless workers, low-income families, and improving education and opportunity for children living in low income families that might otherwise not have many opportunities.

The first guest speaker was Kathryn Edin, author of It's Not Like I'm Poor and $2.00 A Day: Living on Almost Nothing in America, and also the keynote speaker at the upcoming 2016 LSA Annual Conference in Minneapolis in April.

Dr. Edin spoke about the importance of tax breaks for lower-income families. She spoke about a study that was done that tracked spending for low income families. The three biggest categories of personal expenses were everyday expenses, that without a bigger tax cut can leave families high and dry, especially if there's a financial bump in the road. 40% of the budget went to transportation, 25% towards debt, 10% on their kids, and the last 25% miscellaneous. The question posed was, should families in the lower income tax bracket get one lump sum tax return or multiple disbursements throughout the year?

Edin stressed it can be more efficientfor a low-income family to receive a lump sum. Families can pay a loan off, put money down for a car, or buy school supplies and clothes for their kids. Her words were very eye opening for me, as I have never experienced hardships of living day-to–day, wondering where I'm going to get my next meal, or when I'm going to be able to pay that bill. Edin's work and advocacy for familiis living at or under the poverty line is not only important but very inspiring.

Next on the panel was Ellen Nissenbaum, senior vice president for governmental affairs at the Center on Budget and Policy Priorities, who spoke about the effectiveness of the Earned Income Tax Credit's (EITC) success and future opportunities to improve the lives of children in low-income families. With the passage of The PATH Act in December 2015, 16 million people will move above the poverty line which means eight million children move out within that number. She explained The PATH Act is therefore the biggest poverty reduction outside of the Affordable Care Act in 20 years.

Finally, Senator Cory Booker (D-N.J.) was the guest of honor speaker and he shared his experience with low income families and youth with his college service at youth camps near his alma mater Stanford University in Palo Alto, CA. He discussed the his concern about the unfortunately high number of youth living under the poverty line, the majority being minorities. Youth in these low income households are 1.3 times more likely to have a disability, and they only have a nine percent chance of earning a college degree, due to hardships at home, lack of nutrition, and environmental contaminants that can cause illness. These kids fall so far behind due to not receiving the right nutrition, supplies, and support that kids living above the poverty line receive. Senator Booker also explained his support for tax cuts saying that low-income families can't afford a financial speedbump like a parking ticket or a surprise trip to the doctor. Senator Booker also stressed the importance of tax breaks for low-income workers and families. He voiced his support and what he did to advocate for these tax credits to become permanent. Senator Booker encouraged others to work toward solving this issues and quoted an old African proverb saying, "If you want to go fast go alone, if you want to go far go together".

Overall my experience with the speakers and the forum was positive. I went in knowing very little information about tax credits and the dire situation many Americans face on a day-to-day basis. It really informed me about an important problem facing America domestically right now. Major steps are being taken to improve lives, especially of children below or just at the poverty line. But there're still more that needs to be done until the financial hardships start to turn into financial success stories. I am happy I was able to attend this forum and look forward to attending others while here in D.C.